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How the Block Grant Law has Harmed Rock Creek

January 14, 2016

During the 2015 session, the Kansas legislature passed, and Governor Brownback signed, a law that terminated the state’s decades-old public school finance formula. In its place, a new system was created that consolidated public school funding into one “block grant”. That system essentially froze state funding for public schools and caused our school district serious financial harm.

First, the law cut equalization funding, which only impacted poorer districts and cost Rock Creek about $56,000 in state aid. For that reason, the Kansas District Court in Shawnee County ruled the law unconstitutional, a decision which the state appealed to the Kansas Supreme Court. We are awaiting the Court’s opinion regarding equalization and the Court will hear separate arguments regarding the overall adequacy of school funding later this spring.

Secondly, and more importantly for our school district, the block grant law stopped automatically and permanently funding enrollment growth. As you know, Rock Creek is growing rapidly (about five percent last year) and, as a result, we will need to hire at least five teachers in the next two years at a total cost of at least $200,000. Normally, we would pay for those teachers with increased per-pupil state funding and would not need to raise taxes to do so. With the block grant, however, that is no longer possible.

The new law allowed school districts to appeal to the State Finance Council (SFC) to fund “extraordinary needs”, such as increased enrollment or decreased property valuation. This fall, we appealed to the SFC for the amount of funding we normally would have received under the previous funding formula and, as requested, also submitted documentation of the various ways we have produced efficiencies and saved money. Nonetheless, their ruling was disappointing.

The SFC (comprised of legislative leaders and the Governor) decided school districts would bear the costs of enrollment growth up to two percent. No specific reasons or evidence was cited for that decision. This year, assuming we appeal again, a similar ruling would mean we will have borne the cost of a four percent enrollment increase.

Finally, the most potentially harmful aspect of the block grant law is the fact that the reduced funding we did receive is for this fiscal year only. Permanent increased enrollment causes permanent increased costs (teachers, transportation, etc.) but even our reduced amount of funding is one-time money.

It is possible the SFC will grant requests to continue last year’s funding for new enrollment as well as new requests this year. Considering the overall fiscal health of the state, however, I am doubtful. Even if they do so, we won’t know until after our budget has been created and submitted.

At this point, the new law is costing our school district hundreds of thousands of dollars when compared to funding we would have received under the previous funding formula. Sadly, unless we are willing to accept very large class sizes and/or other harmful cost savings measures, our school board will have no choice but to pass much of those costs to local property owners.

As always, please let me know if I can be of any service and thank you for supporting Rock Creek USD 323 and Kansas public education.

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